Since the emergence of Bitcoin Cash on August 1st 2017, there has been an ongoing rivalry between the big block version of Bitcoin and the already-established digital silver, Litecoin. In many ways, the two coins are very similar: they’re designed to allow faster transactions, they have a Keynesian perspective of purpose and utility, and they allow instant confirmations for the convenience of commerce use.
Therefore, it makes a lot of sense to see the two projects compete for their merchant-friendly market segment. Though BCH has had a significant head start in terms of market capital and branding thanks to considerable resources from Bitmain, Bitcom.com, and advocates of big blocks, Litecoin supporters have been calling for “The Flappening” for a long time.
Since Charlie Lee is often nicknamed “Chikun”, chicken flap, and a major market cap overtake is called “the flippening” (such as the expectation that Ethereum would become more valuable than Bitcoin), it makes a lot of sense to refer to Litecoin’s victory over Bitcoin Cash as “the flappening”. The term has become so popular that Satoshi Lite himself has tweeted it on February 25th 2018 to make a bold prediction: the ETH flippening won’t happen, but LTC will become more valuable by the end of the year.
— Charlie Lee [LTC⚡] (@SatoshiLite) December 14, 2018
Charlie Lee is known for making many accurate predictions when it comes to the cryptocurrency market, and he famously called the end of the 2017 phenomenal bull run with a strikingly-precise price estimation for Litecoin (he foresaw the drop to $20). Well, this time it’s about the flappening and how it actually took place two weeks before the year end. So on December 15th 2018, Mr. Lee tweeted his victory with the kind of swagger we haven’t seen in a while.
Litecoin fans have taken their winged leader’s prediction very seriously and they went as far as creating Flappening.watch: a website which analyzes all the metrics by which LTC must overtake BTC. The criteria are market capital, price, number of active addresses, number of daily transactions, daily trading value, daily mining reward, and average block time.
By some metrics, Litecoin had always been ahead of Bitcoin Cash: it handled more transactions and higher volumes, while constantly discovering new blocks 4 times faster (which is a feature by design). In this respect, LTC never lost its supremacy for the more liquid and convenient coin for transactions and payments (though the repeated block increases BCH has undergone did lower the fees in favor of Roger Ver’s version of Bitcoin).
Nevertheless, the most important point of reference which matters in the eyes of most is market capital – and consequently the ranking on CoinMarketCap.com.
In this regard, it seems like the hash wars, the chain split and all the infighting within the Bitcoin Cash community has really crashed the price to the point where Litecoin didn’t even have to get pumped: it simply held its value better during this market cycle.
Bitcoin trader and Magical Crypto Friends member Whale Panda was among the first crypto influencers to witness the phenomenon and write about it on Twitter.
— WhalePanda (@WhalePanda) December 14, 2018
Litecoin vs Bitcoin Cash: Similarities and Differences
As previously stated, Litecoin and Bitcoin Cash serve the same purpose of providing a quick and liquid form of digital money whose store of value function comes as a secondary function. Both coins are all about spending and having the lowest fees, the quickest confirmation times, while also providing a layer of security which maintains the qualities of the early years of Bitcoin. Features such as zero-confirmation help merchants save time, while the lesser amount of decentralization enables for quick improvements to be made.
In spite of these philosophical and technical similarities, Litecoin and Bitcoin Cash have different fundamentals and are marketed in antithetic ways. For instance, Litecoin is regarded as the aid which Bitcoin needs, both financially and technically. In 2017, Charlie Lee has negotiated with the miners in order to enable SegWit and demonstrate its capabilities before the more conservative Bitcoin community embraced the block malleability fix. More recently, the Litecoin creator is also planning to experiment with opt-in confidential transactions, as mentioned in episode 13 of Magical Crypto Friends. Some people call Litecoin as a “testnet” for Bitcoin, though its liquidity and security for on-chain transactions also brings value.
Conversely, Bitcoin Cash doesn’t present itself as a complementary version of Bitcoin; it claims to be THE original Bitcoin as presented in the whitepaper. The community split has also led to a situation where Bitcoin.com, the r/BTC Reddit thread and many other Bitcoin-named hubs actually support Bitcoin Cash, and the entire marketing campaign has sought a state of confusion and brand ambiguiszation.
Technically speaking, BCH is closer to BTC and only features some adjustments to ease commerce use. The fact that the split had happened 9 years into the life of Bitcoin also means that the fundamentals are shared. On the other hand, Litecoin is a fork of Bitcoin’s genesis block and has been running independently and separately since day one. It has four times the maximum coin supply, uses a different Proof of Work mining algorithm to avoid canibalizing Bitcoin mining, and issues blocks four times faster.
Having a community which was built throughout 7 years of existence and growing organically from nothing to a serious contender to constantly escape the “shitcoin” label definitely helps the project. And the fact that all coins were mined through a PoW energy-intensive process also means that holders are more likely to not dump their currencies during difficult times (unlike most of the Bitcoin Cash supporters, who got their coins for free on a 1 to 1 parity according to the BTC they held).
Litecoin overtaking Bitcoin Cash (The Flappening) makes sense
Though Bitcoin Cash has sometimes appeared to pose a serious threat to BTC’s status quo and its propaganda has constantly dismissed upgrades like SegWit, Schnorr, and the Lightning Network, it has failed to live up to its expectations. The fact that it was used in commerce is largely due to Roger Ver’s connection with BitPay (whose creation was co-funded by the Bitcoin evangelist), and its mining efficiency was supported by Jihan Wu’s involvement with Bitmain. These advantages were fragile in the face of greedy vultures who couldn’t wait to divide the community and crash the price, and perhaps none of this would have happened (at least not so soon) if it wasn’t for Craig S. Wright’s influence.
Litecoin has experienced a steady growth which enabled the project and the community to take every step towards legitimization on the market. Getting listed on exchanges, maintaining good relations with the Bitcoin developers, keeping the fees low to compete with Bitcoin Cash and offering the quicker transaction confirmations are all clear advantages which compromise between commerce friendliness and blockchain robustness. Furthermore, building a reputation that’s based on the long-time efforts and not trying to take over an established brand is always a strategy which pays off in the long term. In this case, it just happened to show its results a lot faster than expected, only to solidify Charlie Lee’s mysterious ability to make accurate predictions.
Is this the end of Bitcoin Cash? Definitely not. But this is a strong blow which the project has taken in terms of becoming a legitimate mean of exchange and store of value. Having lower daily trading volumes is already an indicator that your community members don’t really SPEDN, but HODL. But when the HODL paradigm comes crashing down, you might want to reconsider your position and approach.
Oh, and let’s not forget about the bet between Charlie Lee and Roger Ver. It took place a couple of months ago, but “Bitcoin Jesus” will already have to reconsider his outfits.
— Charlie Lee [LTC⚡] (@SatoshiLite) December 13, 2018